Wednesday tips round-up: Salamander, Cairn, Halfords

Date: Wednesday 24 Mar 2010

Salamander Energy shares are trading on a December 2010 earnings multiple of 17.6 times, in anticipation of their drilling programme.

Salamander remains a speculative, high-risk play based on its high-impact drilling programme over the course of this year. Being high risk, investors should not invest a significant amount of money in the shares, but overall remains a buy, says the Telegraph.

BHP Billiton is the largest mining group in the world, with exposure to oil, base metals, energy coal and the commodities used in steel making. The Telegraph continues to think that, as in 2004, fears of a overheating Chinese market are overdone. The shares are trading on a June 2010 earnings multiple of 14.7, falling to 10.4 next year. The yield is 2.6%. The shares are a buy says the paper.

With $600m of cash on the balance sheet and undrawn loan facilities of $900m, Cairn Energy certainly has the firepower to pursue its Arctic adventure. The share price is likely to be driven higher by enthusiasm for Greenland, but it is the ongoing success of the Rajasthan discovery that will continue to underpin the company’s performance. Hold says the Times.

Most analysts support Halfords under its chief executive David Wild, and the shares have rallied strongly above the FTSE All Share index since May last year. Despite this, Halfords offers fair value on a multiple of 12.3 times forecast earnings for 2010, which is in line with the retail sector average. Halfords looks a safe long-term bet for investors and its prospects can only be enhanced by the end of its journey into central Europe. Buy says the Independent.

Fund manager Aberdeen Asset has had a reasonable credit crisis. It suffered from its bonds exposure and has taken time to stem the exodus of client money, but it has also built itself up in other areas, including equity, property and, increasingly, alternative assets. Analysts have pencilled in annual pre-tax profits this year of £194m, comfortably double last year’s £96m. The shares, which yield 4.6%, have not followed suit. Down 1.8% at 126¾p yesterday, they look inexpensive. Hold for growth to resume suggests the Times.

Broker forecasts put Aberdeen on a rating of 11 times this year's forecast earnings against 13 for the sector. That looks good value. Buy adds the Independent.

Despite the ugly-looking numbers yesterday, Henry Boot is actually doing rather well. It is still paying a dividend, offering a yield of nearly 3%, and the stock is up by more than 50% in the past 12 months. Henry Boot's shares have a net asset value of 135p, a figure which has stayed remarkably stable – it is just 4p less than the net asset value recorded at the end of 2007, at the height of the property boom. The market seems to like what Henry Boot is doing. Buy says the Independent.

Trafficmaster, the vehicle tracking company and one-time dot-com darling, now pitches itself as a tool to help the cost-conscious business to cut its fuel bill and carbon footprint. It is a strategy that appears to be paying off for the group’s business services division, Project work, such as the road pricing that Trafficmaster is doing for the Department for Transport, means that the company is well placed in a sector where regulation can create winners and losers. Despite a recent rally, the shares still look reasonable given the huge potential of the business market. Buy says the Times.


Please note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.

« Go back to news channel

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE